A source of frustration for many advisors is the time, money and effort spent on client gifts and entertainment with no apparent return.
Mark, a veteran advisor I’ve known for many years, recently discussed this with me. “I spend well over $5,000 a year taking clients out to lunch and golfing,” Mark said, “and most clients seem to take this completely for granted. In fact, I really don’t feel it has any appreciable impact on deepening my relationships. Some clients don’t even thank me afterwards and I’m not sure that it would make any difference whatsoever on our relationships if I didn’t spend the time and money on this.”
There are several reasons that clients take lunches and small gifts for granted. Many view this as their due for the revenue that advisors generate from their business. In some cases, having someone buy them lunch or take them golfing is a routine event, and they don’t pay particular attention to one more.
Fortunately, some advisors have found a way to make their gifts and entertainment stand out – and offer a valuable lesson on how you will get a bigger return from your activities – as well as recognize and thank clients.
There are four keys to making your activity stand out:
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Tap into emotional high points
The first step is to tap into events that are surrounded by positive emotions. Some advisors pay special attention when clients’ children get married or when grandchildren are born. Others celebrate when clients get a big promotion or when clients’ kids or grandkids get into or graduate from university or get that first big job. Others recognize special birthdays – 50, 60 and 65 get particular attention. And still other advisors put special focus in recognizing the day that clients retire. These are all memorable events for clients that create a wellspring of positive emotions. By attaching yourself to these moments, you tap into the good will and positive memories these events create.
One advisor has found a special way to recognize the birth of his clients’ grandkids. When clients have grandchildren, he has his assistant contact the local paper to get a high-quality proof of the birth announcement. His assistant then has it blown up at a print shop and has it delivered to the clients in a silver-plated frame that they bought in quantity online at a reasonable price. The total cost is under $75 – a trivial investment compared to the goodwill that this small gift generates. This advisor has told me that he regularly gets effusive thanks for this. When he visits clients in their homes, those framed birth announcements are often on a shelf in the living room.
Another advisor taps into the excitement when kids get into a top-tier university. When this happens his assistant goes online and orders sweatshirts with that university’s logo for the prospective student as well as his or her parents.
A third advisor focuses on weddings. When clients tell him that their son or daughter is getting engaged, he asks for a copy of a picture of the couple. Then his assistant orders special personalized postage stamps for the couple to use in sending out wedding invitations or to send thank-you notes to guests afterwards; he also gives the client a sheet of stamps featuring the happy couple in a frame. Once again, the response from clients is completely out of proportion to the cost. At one wedding of a client’s son, the advisor was introduced to other guests as “my long-time financial advisor who came up with those fantastic stamps.”
Make it personal
A second key for appreciation activity to make an impact is for it to be personal. Inviting all your top clients to a great lunch at a top local restaurant may be appreciated. However, if clients know that you are doing this for a broad group, it undermines the sense that this is something that you are doing especially for them.
My article, Investing $15 to Create an Unshakeable Client Bond, described how an advisor and her team got an outstanding response from an inventory of paperback books that relate to 20 hot buttons for clients, from “How to ruin your ex-husband’s life” for newly divorced women to a book celebrating the purchase of their first house by a client’s children. Whenever one of these topics comes up in a phone conversation, the entire team signs it and the book gets popped in the mail.
Retirement is another opportunity to tap into a client’s personal situation. For clients who focus on fitness, some advisors send books like “Younger next year.” For clients into biking, an advisor sends a book on biking after 60. For clients who are keen travelers, you can give a gorgeous picture book from Lonely Planet or 1,000 Places to See Before You Die.
For an activity to feel personal, it doesn’t have to be limited to just one client. One advisor who’s a fan of good wine hosts regular dinners at his home for three client couples. He has the meals catered and has a faculty member from the school of winemaking at a local community college introduce the wines. When he invites clients, the advisor tells them that he is inviting two other couples who love great wine as much as they do. By tapping into shared passions, you can invite multiple clients and still make something feel personal.
Make it unexpected
The third step for recognition activity to have an impact is to surprise clients. By definition, if something is expected, no matter how much your clients enjoy it, after a while it loses its impact. My article, The Most Memorable Client Thank You Ever, described how an advisor impressed his top client by tapping into a passion in an unexpected way.
Another advisor hosts surprise lunches for top clients to celebrate their 50th or 60th birthdays. e inviting his client’s closest friends to participate. (When asked how he gets around the cap on spending on client entertainment, the advisor’s answer is that he treats the lunches for the other attendees as business development – a legitimate expense given that some guests at these lunches have turned into clients.)
One advisor calls every client over 65 to “be among the first to wish them happy birthday.” For clients under 65, he only calls on birthdays ending in “5” or “0” – his view is that if he made this call every year it would lose impact. Along similar lines another advisor sends clients a restaurant gift card for their 60th birthday. The accompanying note says that he wants to acknowledge a special birthday in a special fashion.
In the category of the exceptions that break the rule, I’ve spoken to other advisors who do something every year to the point that it has become their signature activity. One advisor drops holiday wreathes off at the home of top clients in early December and another invites his top 20 clients for an annual birthday lunch. The reason these work is that they are still seen as something that no one else is likely to do; so while at this point not unexpected from that advisor, they continue to reinforce the gratitude that the advisor feels for the opportunity to work with top clients.
Don’t be self-serving
The final ingredient to getting a payoff from client gifts is to separate it from anything that comes close to financial matters; introducing financial issues into the mix lessens the impact. While a share of Disney to kick-start a college fund might make a great gift to celebrate the arrival of a client’s grandchild, it doesn’t pack the emotional punch and doesn’t have the same impact as that framed photo of the birth announcement. There’s nothing wrong with inviting clients who’ve provided referrals for a nice thank-you dinner, but don’t confuse that thank you with true appreciation for the opportunity to work together.
When I’ve talked to advisors who are succeeding in having their gifts resonate with clients. It’s never about the money they spend. Rather, getting this right requires a shift in mindset and a commitment to spending the time and effort to ensure that your gifts tap into emotional hot buttons and are personal, unexpected and devoid of any self-interest. Follow that formula and you too will get a payoff from your client-recognition activity.
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
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